Crowdsourcing in 2014: With Great Power Comes Great Responsibility

Image: Photos by Mavis/Flickr

At the onset of 2014 we find crowdsourcing where cloud was just a few short years ago — widely discussed, unevenly adopted and on the cusp of widespread industry impact. Similarly, we will see crowdsourcing experience hypergrowth but also leave some damaged bystanders that were caught up in the hype and mislead (aka private cloud circa 2006-7).

In 2005, while working in SAP corporate strategy, I read the “Wisdom of Crowds” by James Surowiecki and decided to put to test an experiment from the book using the strategy team. I asked each team member to guess the number of marbles in a (virtual) jar. We averaged the guesses and saw that our collective intelligence had scored better than 95% of us individually. The book and several studies actually showed our results underrepresented the power of the crowd. In groups of forty or more the crowd is often better than 99% of the participants. Beyond that, when repeated, the people who beat the crowd tend not to do it consistently (i.e. the 1% changes with repeated trials).

So even in 2005, thanks to Surowiecki’s best seller and others, the wisdom of crowd was a widely discussed topic. Yet nearly a decade later, the wisdom of crowds and crowdsourcing feels like it has just emerged. Crowdfunding, Crowd advertising, Crowd coding, Crowd based knowledge (i.e.Wikipedia) and many other ‘experiments’ now appear to be popping up everywhere. Helen Huntley, a well-known Gartner analyst even predicts, “By 2016, application services providers will have replaced 20 percent of their internal application management staff with crowdsourcing and community sourcing.”

What innovation in cloud, social and mobile technologies has done is allow the wisdom of crowds to apply to more problems with faster results than ever before – iTunes makes nearly every app developer instantly global, Uber crowdsources your rides, Airbnb expands potential places to stay. In turn, crowdsourcing, has become a powerful partner to innovation — allowing companies like Lego to co-create with their customers. Crowdsourcing helps even the expansion of the technology trends that enabled it – allowing more businesses and people to tap into a world of talent to make cloud, social and mobile new capabilities widely accessible.

For all the benefits of crowds, without control and understanding, they can become herds and reinforce group think. The benefits of crowdsourcing are related to the independence of the actors participating. It’s the diversity of perspectives that lead to enormous benefit. Open Innovation rests on the idea that firms benefit by bringing in external stimuli. If those firms are constricting and conditioning (educating) external crowds to their way of thinking they constrict its effectiveness in bringing variety to your problem space.

For example, when Harvard Medical School wanted to optimize the calculation of edit distances between DNA strings they ran competitive challenges that received over 120 submissions with nearly 90 unique approaches to solving the problem. More than half the solutions performed better than the original solution with the winning submissions performing 100x better. They benefited from the fact they had not trained the community participating in the work.

Managing communities or crowds involves explicitly not managing them in the traditional sense. It is critical to create processes that provide incentives, fairness in evaluation, transparency and an ability to bring the results back into your organization. Without this, experimenting with the crowd can create substandard results or even backlash against the organizers.

The crowd can reinvent your customer experience, create new innovation or even reshape your competitive landscape in 2014. But in the words of Uncle Ben in Spiderman, “with great power comes great responsibility,” so use it wisely.

Narinder Singh is the co-founder of Appirio and president of topcoder, a crowdsourcing development community. Find him on Twitter @singhns.

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